Hi,

I have a question, I was a foreign student in US till 2003. I filled my first tax return in year 2001 because I had an income at that time. After that assuming I don't have to file because I didn't have an income in year 2002 and 2003 I did not file any return nor I filled the form 8843. After that I went back to my country and come back on H1-B in 2004 and have earned wages for which I got W-2's. Since I am required to file a return now, I have a question should I file the previous years form 8843 as well with my return.

Also could you please tell me what forms to use out of 1040NR/1040NR-EZ or any other which I am not aware off.

Thanks,
Sunny

Do not file the previous years Form 8843. It will only confuse matters. If you need to file Form 8843 for 2005, that will update your file to the satisfaction of the IRS.

Of course, a Form 8843 may not be needed. When did you arrive in the U.S. under the H-1B?

Thanks a lot for your help.
I came to US on H1 in Oct 2004 but did not work that year and went back and then I came back again in Jan 2005, since then I am working and have all my W-2's.

Also could you please tell me what forms should I use to file my tax return.

Okay, if you worked most of the year under the H-1 visa, you must file as a resident alien.

You must file Form 1040, 1040A or 1040EZ. You probably qualify to use the Form 1040EZ, which is the easiest form to file. You can do so online. I recommend you use www.taxact.com, as they will let you file and print for about $10, plus file your state return.

You do not need to file Form 8843 if you file as a resident alien, nor should you file Form 8843 for past years.

Thanks for the reply.
I will tell you my case here. My wife is a canadian citizen, I am a canadian resident. She works in Canada and her taxes are being withheld from her paycheck. I am on H1 in US, for me taxes are being withheld in US. Since I am here in US for more than 183 days, I am considered a resident alien for tax purposes and have to file 1040. Lately I have been reading a lot about what forms to file and stuff. I would want to double check with you before I prepare my return.

For Federal return, I will have to file married filling jointly

Form W-7 for ITIN number for my wife with a notarized copy of her passport
a)A declaration stating that I am claiming my wife to be resident signed by both to get a standard deuction of 16,400
b)Form 1040
c)Form 2555 for foreign income exclusion (for my wife, her income is about 43000 CDN$)
d)Form 1116 for foreign tax credit
e)Schedule B (for interests on deposits from savings account in canada and usa)
f)Form 8819 (for RRSP my wife has in Canada, even though she didn't put any money in them last year)
g)Form T DF.90-22.1(for me and her to show all the bank accounts in a foreign country)

If these are the correct forms I have few questions.

On form 1040, Line 7, I have to put all wages mine from W2's and hers from her T4's. So I have to do the conversion from Cdn to US dollars

Ques) what conversion rate should I use to convert Canadian to US?

On form Line 8a I have to put all the bank interests paid to her and me and attach Schedule B since the combined intersts from banks from US and Canada for me and her is more than $1500 US Dollars

Ques) Should I be using only one schedule B for both of us?

On line 21 of 1040, I can claim her foreign income exclusion by filling form 2555 or form 2555EZ

Ques) Is it better to claim foreign income exclusion or file form 1116 to claim foreign tax credit.

Ques) By claiming foreign tax credit will I be able to increase my refund?

Another big Question which I am not able to answer myself is. Since I will be filling my return in Canada and my wife will also be doing the same as a resident for both of us, we both have interests on deposits from Banks in Canada and I have interests on deposits from Banks in USA. On these interests the taxes hasn't been withheld but I would have to pay taxes as they are taxable and will increase mine and hers gross income.

Ques) How will I calculate the taxes for interests on deposits from Banks in Canada for her and me to get a credit on Form 1116 and vice versa to get a credit on Canadian tax return so that we don't get double taxed on this income?

Your reply will be highly appreciated.

Use the conversion rate on the date you calculate the return.

Use only one Schedule B for both of you.

Use either Form 2555 or 2555EZ.

Form 1116 is for foreign taxes paid on investment income, not earned income. File Form 2555 or 2555EZ.

I cannot answer you last question, since I do not do Canadian tax returns.

Thanks a lot for all your help. I appreciate it.

Just wanted to ask you if I am on right track by fiiling all the forms which I mentioned in my previous message or do I need to know something else which I am not doing.

SunnySingh:

You seem to have everything right!